Wednesday, July 27, 2011

Many buyers call us to get pre-approved for a mortgage before they begin their search for a real estate agent. Here are the two most common questions they ask us.

• How much does it cost me to hire a real estate agent?

• Do I have to use the real estate agent who is selling the house?

Of course, the answer to these questions is obvious to anyone in the real estate business, but it is incredibly important to remember that your clients are NOT in the real estate business. They really don't know the answers to these questions.

Truly successful agents constantly remind themselves that their clients and prospects usually don't know basic information. Whoever provides the most value to a prospect will get the deal. Be the person who provides the most basic information and deals will come your way.

Many years ago, I used to sell furniture. I closed an incredible number of wooden table sales by saying to the customers, "Hey, did you know this table is made out of wood?" Some of them laughed, but many of them bought from me because they said I was the first one to tell them the basic information they wanted.

So tell your prospects that it costs the buyer nothing to use a real estate agent, and that any agent can sell any house. You'll get more deals!

Getting a loan approved is easy - if you know what to do. The Mortgage Experts know what to do!!!

Tuesday, July 19, 2011

This week's winning question was submitted to us by Jani Bielenberg at Bielenberg & Associates, Metro Brokers. Jani receives a $25 gift card and gets her contact information sent to the 6,600 people on our contact list. We also list her contact info on our blog (10,199 visits for the first 6 months of 2011) and on our blog at Active Rain, a real estate blog with more than 210,000 members.

Jani's question is: "We recently received a "Pre-Qualified" lender letter for a Buyer on one of our listings. On the loan conditions deadline, we received notice that the Buyer was not approved for the loan. The reason being, the Buyer was retired and the part-time job/salary could not be used because it only had a 6 month history, even though it was in the same field of work. Everyone involved in the transaction was disappointed to say the least. How could a "Pre-Qualified" letter have been issued knowing upfront that this would very likely be an issue? No disclosure was made. What is the workaround when the Buyer's lender is not a company that you recognize?"

Here's the answer: The buyer probably had too long of a gap in employment from the time he retired until he started the part-time job. If the gap were only a month or two, then an underwriter might accept the income from the part-time job.

A good loan originator will ask enough questions when he qualifies a borrower to make sure he's not making a mistake like this. Unfortunately, many of us are not trained very well when it comes to interviewing people. If someone has retirement income and also income from a job (whether it’s part-time or full-time), the lender needs to dig a bit deeper with his questions. Once he has all the information, he should then call an underwriter if he is still not 100% sure that the borrower will be able to get a loan.

I am guessing on this, but I would say that the lender never had a clue that it would be a problem. Even though we need to be licensed and pass a test to be an originator, anyone who spends more than a few minutes studying for the test can pass the test. It is hardly a good measure of how competent someone is. It is entirely possible to be licensed as a mortgage loan originator and not know much of anything about mortgages. It looks like you got stuck with someone who is not very good at his job. The real tip-off that they are not good is that they waited until the very last minute to tell you. As lenders, we know pretty early in the game whether a loan is going to have problems or not. If it is, then it is our responsibility to alert everyone as soon as we know about the problem.

As far as the workaround when the buyer’s lender is not a company you recognize, your best bet is to call the lender who wrote the letter as soon as you receive a letter (before you accept an offer), and ask them if they ran the loan through the online underwriting software that Fannie Mae, Freddie Mac, FHA, and VA provides to lenders. Also ask them if they checked the lender’s underwriting overlays (the additional guidelines that many lenders add on top of Fannie, Freddie, FHA, and VA). And finally, ask them if they checked the mortgage insurance underwriting guidelines. If they don’t answer YES to all three of those questions without hesitation, then you are probably not dealing with a very competent lender. Using the underwriting software and manually checking the lender and mortgage insurance guidelines is the absolute minimum amount of work an originator needs to do before writing a pre-approval letter. A good lender never minds answering a listing agent’s questions, so make sure you call the lender when you receive a pre-approval letter.

Getting a loan approved is easy - if you know what to do. The Mortgage Experts know what to do!!!

Thursday, July 14, 2011

This week's winning question was submitted to us by Nancy Woodson at Metro Brokers Denver Home Real Estate, Inc. Nancy receives a $25 gift card and gets her contact information sent to the 6,600 people on our contact list. Her contact info follows:

Nancy's question is: If a buyer has locked in the interest rate for a short sale transaction, and the deal is taking longer than expected to close, does the buyer have to pay for a rate lock extension? Are they obligated to use the original lender, or can they switch lenders to avoid the lock extension fee? Would they incur any fees if they switched lenders?

Here's the answer: Each lender has different rules for when the interest rate lock expires. Some lenders will allow the rate to be re-locked with no penalty (provided the current rate is the same or lower than the old rate). Other lenders will force the buyer to pay for a lock extension, unless the rate lock has expired for a minimum period of time (usually 30 days).

Under NO circumstances is the buyer obligated to use the original lender. A buyer is NEVER obligated to use a lender until they have signed the last piece of paper at the closing.

If the buyer decides to change lenders, they do not have to pay the lender anything except the exact costs for third-party fees incurred by the lender (appraisal, title work, etc.). If the buyer decides to change lenders and the loan fails to close through no fault of the lender, then the buyer may have to pay up to $300 to the lender for preparation work performed.

Regarding these fees, we don't know any title company that charges for loans that don't close, and no lender with any good business sense at all will charge a buyer $300 if a loan doesn't close. Appraisers expect (rightfully so) to be paid for the work they perform. It is always wise to ask the new lender if they will accept the old appraisal, saving the buyer the cost of two appraisals.

The bottom line is that a lender should do everything possible to explain to a buyer why locking an interest rate on a short sale transaction is a horrible idea until the short sale approval is obtained from the seller's lender. We do many short sale transactions and have never had a problem with rate locks because we explain that short sales take more time than everyone would like. Locking a rate when you don't know the closing date is just silly (and very bad business).

Getting a loan approved is easy - if you know what to do. The Mortgage Experts know what to do!!!

Monday, July 11, 2011

Most lenders require a 640 credit score these days for FHA loans. We can do FHA loans with a 620 credit score and only 3.5% down.

Don't have a 620 score? Then give us a call. We will tell you exactly what to do to raise your scores. Oh yeah - we will tell you what to do for free! All you have to do is pay for the credit report ($25 for a single borrower and $30 for a couple). Then we run your credit report through software provided by the three credit bureaus, and it tells us exactly what you need to do to raise your scores. We have been doing this for more than 3 years now, and about 50% of the people listen to us and buy a house. The other 50% don't listen to us, end up getting ripped off by a credit repair company, and keep renting.

Getting a loan approved is easy - if you know what to do. The Mortgage Experts know what to do!!!

Tuesday, July 5, 2011

Real estate agents are always asking us questions. That's a good thing. Now it gets even better!

Email us a question about mortgages. If we choose your question, we'll answer it in our next email newsletter, ANDwe'll deliver a $25 gift card to you as a way of saying "Thank You" for helping to expand the knowledge base of our local real estate industry.

If you'd like, we'll also include your name and contact information in the newsletter, which goes to 6000 real estate agents and 600 of our past clients and current prospects.

So here's what you get, just for asking a question about mortgages:

$25 gift card - delivered to you personally.

Your name and contact information sent directly to 6000 local real estate agents and 600 of our local clients and prospects.

The correct answer!

A chance to help expand the local real estate knowledge base.

Getting a loan approved is easy - if you know what to do. The Mortgage Experts know what to do!!!

Low Interest Rates, Low Closing Costs, and our loans close!

2011-2015 FIVE STAR Mortgage Professional Award Winners

Here's What People Are Saying About Us

"I always turn to Chris and Debbie to secure mortgage financing for my buyers because I rely on their unending commitment to customer service and their vast knowledge when it comes to mortgages. I recommend them to anyone - without even a moment's hesitation - they are simply amazing."

"Every transaction that Debbie and Chris have been involved with has closed on time with no issues. It’s no wonder 5280 Magazine has designated them an award winner. The buyers have been pleased with their professionalism and their willingness to go the extra mile. They are patient and willing to work with potential buyers who have credit issues. A pleasure to work with."

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